State reclaims stake in film production
Tax incentives for movie and television production are keeping jobs and billions of dollars in California, according to a study released Tuesday.
The state incentive program launched in 2009 has created 20,000 industry jobs, spurred more than $20 in spending for every $1 in tax breaks and generated $3.8 billion in total economic activity, according to the Los Angeles County Economic Development Corp.
Assemblyman Felipe Fuentes (D-Sylmar) has authored legislation seeking a five-year extension of the tax credit program, which is overseen by the California Film Commission. The tax breaks otherwise would expire in 2014.
Fuentes’ measure passed in the Assembly and is awaiting action in the Senate.
On Tuesday, Fuentes stumped for his legislation and unveiled the economic study on the Burbank set of the ABC drama “Body of Proof,” which was shot in Rhode Island before qualifying for tax incentives and moving to California.
Fuentes’ effort is backed by industry representatives, authors of the study and Los Angeles City Councilman Paul Krekorian, who as an assemblyman authored the bill that created the tax incentives to slow “runaway production.” He has since created separate incentives for filming in Los Angeles.
“If our state government is serious about getting Californians back to work, we must be aggressive in preserving the industry that creates so many middle-class jobs and supports so many businesses both small and large,” Krekorian said in a statement.
The program offers tax breaks worth 20% to 25% on expenses for crew payroll, post-production work, equipment rentals and food and wardrobe services. To qualify, productions must have an overall budget of $75 million or less. Television shows can only qualify if production is moving from an out-of-state location to California.
Forty other states and Canada offer similar, often more lucrative incentives. At one time, California was home to more than half of all movie productions, according to the Los Angeles County Economic Development Corp., but that share has dropped to about 39%.
Christine Cooper, the economist who authored the study, said the growth of the movie industry elsewhere also threatens post-production and back-office jobs that traditionally have stayed in California no matter where the cameras rolled.
“This risk is present and growing as industry clusters that have been facilitated by other states’ incentives programs take hold and grow,” she said.
The study, commissioned by the Motion Picture Assn. of America, suggests the incentive program be expanded to include big-budget films, as well as television series already being shot here.
“Many of these series can be long-running, meaning that local spending will persist, supporting local ancillary businesses,” the study states.
Fuentes’ legislation does not call for expanding the program, but would extend it until 2019.